June 30, 2021
By Rebecca Torrence
Costs for common generic drugs can vary among hospitals by more than $50 a pill, a study has found, with some health centers ignoring federal regulations designed to make pricing information easily accessible to patients.
GoodRx Holdings Inc., a digital healthcare platform, compared prices for 12 generic drugs at 16 hospitals. Some charged a nearly 6,000% markup on average compared with the pharmacy price for the same drug. Zoloft, used for depression and anxiety, costs $57 a pill at a Las Vegas hospital but just 50 cents a pill at a Tennessee hospital.
The dysfunction has persisted despite federal efforts to increase transparency. As of Jan. 1, a ruling by the Centers for Medicare & Medicaid Services requires hospitals to publicize prices for all drugs and services. But the complicated data sets they use can be difficult for patients to unravel, letting hospitals set prices as they see fit.
“Being able to identify exactly how much you’re going to pay as a consumer is virtually impossible,” said Tori Marsh, director of research at GoodRx.
The Trump administration’s effort to require hospitals to disclose their rates in a “consumer-friendly format” was praised by patients and employers who worried the lack of transparency kept prices high. But GoodRx found the information released is often riddled with errors and complex medical terms.
Meanwhile, the fine for noncompliance is $300 a day, which Marsh said may not be sufficient to force adherence, especially with enforcement lagging in part due to Covid-19. “A lot of hospitals are still not adhering to the CMS regulations,” Marsh said.
Patients don’t normally get a monthly supply of a drug directly from a hospital. At the same time, it’s “very unlikely” for patients taking a common generic drug to be able to bring their bottle from home, Marsh said. That means those who need pills such as antidepressants or painkillers during a multiday stay must pay hospital prices for drugs during their visit.
Providers have long argued against releasing the prices of their drugs and services on the basis that hospitals negotiate prices with insurers, giving most patients a significant discount on their final bill.
Still, patients who are uninsured or receiving out-of-network care can be hit with hefty costs. Even if those patients get discounts directly from the hospital, research from the Kaiser Family Foundation suggests uninsured patients may pay two to four times than what insurers pay for a hospital service.
Because there’s no cap on hospital drug prices, “we’re seeing how far hospitals can push these prices up,” Marsh said.
The new CMS rules should allow patients to compare prices online to seek out lower-cost care before going to the hospital. But a recent poll by the Kaiser Family Foundation suggests most adults don’t know this information is available.
Only 9% of adults surveyed by the foundation said hospitals were required to disclose prices on their website, while 69% said they were unsure and 22% said hospitals were not required to release this information.
Additionally, Marsh said that even if consumers could easily access the information, the opportunity to compare costs among hospitals would still be a burden for many, especially if they’re seeking critical care at an emergency room.
“I’m sure there’s very few people who are actually shopping around before an ER visit, because it’s likely that they really need this service,” she said. “If they delay that to find another hospital, it could affect them dramatically.”
While recent regulations focused on transparency are a step in the right direction, Marsh said they can’t affect prices directly, calling them “Band-Aids” on a bigger problem.
“In the next months and years to come, more should be done to bring those prices toward the median,” she said.
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